Healthcare Policy Update: June 1, 2022

National Policy Update

Spotlight on Behavioral Health
  • On March 23, Senators Patty Murray (D-WA) and Richard Burr (R-NC) held a hearing on addressing mental health and substance abuse disorder (SUD) issues exacerbated by the pandemic, with the goal of creating a legislative package sometime in the early summer. The bill is expected to contain language for funding for community-based mental health services, preventing overdoses, reducing mental health stigma, and bolstering the mental health workforce.  Witnesses at the hearing testified to provider shortages, inadequate Medicare and Medicaid reimbursement rates, and treatment siloes of mental health and behavioral health. 
  • On February 18, CMS approved CO’s request for a risk mitigation waiver to adjust the terms managed care contracts related to its demonstration for “Expanding the Substance Abuse Disorder Continuum of Care.” CMS has provided states with new flexibilities to modify existing waivers during the public health emergency (PHE). 

Federal Policy Updates 

US Representatives Question State Contractors on Medicaid Eligibility Redeterminations 
  • On May 6, House Energy and Commerce Committee Chairman Frank Pallone (D-NJ) and Senate Finance Committee Chairman Ron Wyden (D-OR) sent letters to state Medicaid contractors asking for information on how they are preparing for the large number of Medicaid eligibility redeterminations expected at the end of the COVID-19 PHE.  During the PHE states must maintain Medicaid enrollment of beneficiaries in exchange for an enhanced federal medical assistance percentage (FMAP) of 6.2%.  Although the Biden Administration will provide states with a 60-day warning and the PHE declaration is likely to last through 2022, large coverage shifts and disenrollment of beneficiaries are expected to occur during the transition.  The letters sent to contractors ask for details on each company’s contract terms, their experience with Medicaid eligibility, and capacity to fulfill their contract’s.  Representatives emphasized to private government contractors that children, people of color, and those with limited English proficiency are at higher risk of coverage disruptions which could increase health inequities.   
 HHS Report Shows a Decrease in the Uninsured Rate 
  • On April 29, a report from the HHS Office of the Assistant Secretary for Planning and Evaluation (ASPE) found that the total US uninsured rate also declined from 10.3% in 2020 to 8.8% at the end of 2021, indicating that about 4.9 million people gained coverage. Additionally, over 35 million people were enrolled in Medicaid expansion, Basic Health Plan, and marketplace coverage at the beginning of 2022, demonstrating the success of the ACA in increasing insurance coverage.  Over the last 2 years, the passage of the Families First Coronavirus Response Act guaranteed continuous coverage of Medicaid enrollees, 2 states (OK and MS) expanded Medicaid eligibility to 138% of the federal poverty level, and both the federal government and all 15 state-based marketplaces implemented extended special enrollment periods (SEP). The report notes that OK and MS, Medicaid expansion increased enrollment by more than 276,000 and 146,000 individuals in each state, while roughly 4 million individuals could gain coverage if other states expanded. 
 HHS Finalizes the 2023 Notice of Benefit and Payment Parameters 
  • On April 28, CMS finalized its annual rule regulating individual market insurers, state exchanges, and federally facilitated marketplaces (FFMs). The rule reinstates some policies that were originally introduced under the Obama Administration, i.e., standardized plans.  
  • Plans on in the FFM must now offer standardized plan options at every metal level, service area, and network (e.g., a gold HMO) that they offer non-standardized options to make it easier for consumers to compare coverage and shop for the plan that best suits their needs.  About 11 states including CA and OR already require or are implementing  standardized options and are exempt from these new requirements.  
  • CMS is also finalizing requirements for network adequacy standards for the time and distance of patient access and limiting the range of actuarial value of plan metal levels to further differentiate the level of healthcare coverage between bronze, silver, and gold plans. 
  • CMS is currently in the process refining its nondiscrimination policy for essential health benefits to be based on clinical evidence by developing a proposed rule to prohibit discrimination based on sexual orientation and gender identity to align with other ongoing rulemaking.   
  • Other changes in the rule include setting the maximum annual limit on out-of-pocket costs, requiring plans to address health equity in their quality improvement strategies, and increasing the minimum number of essential community providers (defined in the ACA as those that serve predominantly low-income, medically underserved individuals) in a plan’s provider network. 
CMS Releases Strategic Plan 
  • On April 20, CMS released a strategy document outlining 6 pillars for continued improvement. It highlights CMS’s commitment to advancing health equity and addressing disparities, expanding access by building upon the ACA, engage partners and community stakeholders throughout the policymaking process, driving innovation through value-based and person-centered care, protecting the sustainability of public-funded programs, and fostering excellence the CMS’s operations.  CMS spotlighted their various goals in improving integrated behavioral health care delivery, drug price affordability, maternal care quality and extending postpartum coverage, and access to care in rural areas, and also ensuring a smooth coverage transition at the end of the PHE by working with state Medicaid agencies with robust guidance and outreach strategies. 

State Policy Updates 

CO Senate Passes PBM Reform Bill 
  • On May 23, the CO legislature passed HB1122 which prohibits PBMs from reimbursing rural, community pharmacies less than the average national drug acquisition cost and discriminating against 340B covered entities, specifically banning a PBM from refusing to reimburse 340B pharmacies or certain drugs, assessing additional fees, restricting access to the a pharmacy network, or restricting the methods they dispense or deliver 340B drugs.  A number of other bills that would regulate PBM business practices (gag clauses, reimbursement, dispensing fees) are being considered in other states. 
CMS Approves TX 1115 Waiver after Legal Back and Forth 
  • On April 22, CMS sent a letter to TX’s Medicaid Director informing the state that they will not pursue additional litigation against TX’s 1115 Medicaid waiver approval at the end of the Trump Administration. The 10-year waiver extension provides funding to help operate Medicaid managed care programs, increase uncompensated care payments to hospitals, and administer delivery system reform incentive payments (DSRIP).  While CMS under the Trump Administration stated that the standard comment process was not needed because of the public health emergency, the incoming Biden Administration had argued that the public notice and comment period was not followed and should be resubmitted.  The waiver provides up to $3.1 billion of funding each year for uncompensated care to hospitals and other providers, which some stakeholders have noted effectively provides coverage for the uninsured population and removes incentives for the state to expand its Medicaid program and directly address health equity. 
 SCALE Market Research provides clients with relevant federal and state policy news related to coverage, payment, and regulations for healthcare trends.  To learn more, connect with us.